Spanish bailout fails to calm markets

Spain and Italy have appealed to European policymakers to step up the response to the financial crisis after a €100bn lifeline for Spanish banks failed to calm markets.

Spanish prime minister Mariano Rajoy said yesterday he will “battle” central bankers refusing to buy debt from peripheral nations. Rajoy published a letter to EU leaders calling for the European Central Bank to buy debt from the countries struggling to shore up their finances.

“That is the battle we have to wage in Europe,” Rajoy told the Spanish parliament in Madrid. “I am waging it.” His Italian counterpart, Mario Monti, told lawmakers in Rome Europe faces a “crucial” moment.